Overseas Stock Capital Gains Tax: Tax Savings Possible by Using 'Profit and Loss Offsetting' Through Selling Loss-Making Stocks

The 'profit and loss offsetting' strategy, which reduces the tax burden by lowering the profits generated from overseas stock investments, is drawing attention. This method involves selling both profitable stocks and loss-making stocks in the same year to lower the total net profit.

'Profit and Loss Offsetting' that combines profits and losses... lowers the taxable amount

According to a National Tax Service video, overseas stock capital gains tax is calculated based on the net profit generated during one year. The method of combining profits and losses by selling both profitable stocks and loss-making stocks together is called 'profit and loss offsetting.'

For example, if a 10 million won profit is generated from Stock A and a 5 million won loss is generated from Stock B, if both stocks are sold, the net profit is calculated as 5 million won. If the basic deduction for overseas stock capital gains of 2.5 million won is applied to this, the final amount subject to taxation is reduced to 2.5 million won. If only the profitable Stock A were sold, the taxable amount would be much larger, so temporarily selling stocks that are currently in a loss to realize the loss can be helpful for tax savings.

May Capital Gains Tax Final Return is mandatory... 20% penalty imposed if not reported

Overseas stock capital gains tax is an item that must be reported separately and is not combined with comprehensive income tax. The reporting period is every May, and the 'Capital Gains Tax Final Return' must be carried out within the comprehensive income tax reporting period. The video advised caution not to confuse this with the comprehensive income tax report.

The economic disadvantages of missing the reporting deadline are also significant. If a report is not filed after passing the reporting period, a 'non-reporting penalty' of 20% of the profit may be imposed, and if payment is delayed, an additional 'late payment penalty' will be added. The presenter emphasized preventing unnecessary tax expenditures through timely reporting, stating, "To save on taxes, it is important to report and pay on time."